Oct. 29--Highwoods Properties, the largest suburban office landlord in the Southeast, reported third-quarter results late Wednesday that beat Wall Street estimates.

The Raleigh real estate investment trust continues to benefit from its strategy of paying down debt and using its healthy balance sheet to retainand winnew tenants during the downturn.

The company's 35 million square-foot portfolio was 87.8percent occupied at the end of the quarter, down slightly from the second quarter.

"While economic conditions are choppy, by leveraging our ability to fund tenant improvements and leasing commissions, we are winning more than our fair share of deals," Ed Fritsch, Highwood's chief executive, said in a statement.

During the third quarter, Highwoods added $75 million in office development, including an FBI field office in Jackson, Miss., and the GlenLake Six and CentreGreen V buildings in Raleigh. The three properties were 83 percent preleased. The company also reported that it has sold 91 condominiums in RBC Plaza, or 65 percent of the total available for sale.

Highwoods reported funds from operations, a profitability measure for REITs, of 62 cents per share during the three months ending Sept. 30. That's 2 cents above the average estimate of analysts who follow the company.

The company raised and narrowed its full-year guidance on funds from operations to a range of $2.59 to $2.62 per share from a range of $2.52 to $2.60.

Highwoods took further steps to strengthen its balance sheet in the third quarter. It secured two loans totaling $162 million in August and used some of that money to pay off $91 million that it had outstanding on a $450 million unsecured credit facility.

Fritsch said the company has no debt maturing during the remainder of 2009 and 2010 and $54 million in cash. The company has $137 million of debt scheduled to come due in 2011.

Results were released after regular trading on the New York Stock Exchange. Shares fell $1.44 to close at 27.23. The stock has fallen 17 percent in the last month.

david.bracken@newsobserver.com or 919-829-4548

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